Solvency Funding Relief Regulations (SOR/2006-275)

Regulations are current to 2015-07-09 and last amended on 2015-04-01. Previous Versions

 [Repealed, SOR/2015-60, s. 39]

Statement to Members

 When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also provide the following information:

  • (a) the amount of the initial solvency deficiency;

  • (b) the fact that the deficiency is to be funded in accordance with this Part by equal annual payments over a period not exceeding 10 years; and

  • (c) the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan.

Reduction of the Face Amount of a Letter of Credit

  •  (1) The face amount of a letter of credit may be reduced, effective the beginning of a plan year, by

    • (a) the amount by which the aggregate amount of payments that the employer has made to the pension fund in the previous plan year exceeds the total of the required special payments and the normal cost of the plan for that year as shown in an actuarial report; or

    • (b) the amount by which the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan exceeds the amount set out in paragraph 19(2)(a) or (b), as the case may be.

  • (2) The face amount of the letter of credit shall not be reduced following a default.

  • SOR/2011-85, s. 20.

New Solvency Deficiency

  •  (1) Despite section 9 of the Pension Benefits Standards Regulations, 1985, a solvency deficiency that emerges after the day on which the initial solvency deficiency emerged shall be calculated as the amount by which the solvency liabilities exceed the sum of the following amounts:

    • (a) the adjusted solvency asset amount,

    • (b) the present value of special payments made under section 19 if at least one of those payments is due more than five years after the valuation date, and

    • (c) the present value of the going concern special payments that were used to fund the initial solvency deficiency that are due during the period beginning on the valuation date and ending on the 10th anniversary of the date of emergence of the initial solvency deficiency if at least one of those payments is due more than five years after the valuation date.

  • (2) The interest rate used to determine the present value of the special payments referred to in subsection (1) is the same as the interest rate used to determine the solvency liabilities.

  • SOR/2010-149, s. 14.

Failure to Pay Letter of Credit

 On receipt of the notice from a holder that an issuer has not paid the face amount of a letter of credit after a demand for payment has been made, the employer shall remit to the pension fund no later than 30 days after the day on which the demand for payment was made, an amount equal to the face amount of that letter of credit.